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AT&T chief addresses network problems in NYC, San Fran

AT&T Mobility's Ralph de la Vega admitted the carrier's wireless network is not up to par in areas of Manhattan and San Francisco, and said the company is working hard to get network issues resolved in those two key markets.

Speaking at the UBS Global Media and Communications conference this morning in New York City, de la Vega said in New York City the company has experienced prodigious growth in mobile data traffic from smartphone customers, particularly those using Apple's iPhone. And when the company converted its 850 MHz spectrum to 3G, it immediately experienced a 30 percent increase in traffic because its wireless signal could now penetrate high rise buildings and basements. That extra traffic put pressure on AT&T's backhaul capacity. AT&T is currently increasing its backhaul capacity in New York to improve the situation. "New York is a key market," said de la Vega, president and CEO of AT&T Mobility and Consumer Markets. "And we will do better."

In San Francisco, the situation is a little different. De la Vega said there the carrier has to upgrade some 2G microcells to 3G, and has run into some zoning issues that are taking longer than expected to resolve. Nevertheless, he said that both San Francisco and New York City will see significant performance improvements soon.

De la Vega also confirmed industry reports indicating about 3 percent of AT&T's smartphone users are generating about 40 percent of its data traffic. He added that the company is studying consumer mobile data usage patterns and trying to come up with ways to encourage these users to modify their usage. However, he stopped short of saying that the company will implement usage-based pricing--but did say that eventually mobile operators may need to consider it. "I think we need to educate the customer. The customer has to understand what represents a megabyte of data." He noted that when AT&T educated landline customers on their landline data usage, the company immediately saw a reduction in usage. "We found out that customers didn't know how they were using data ... and when they found out, the reduced their usage."

Regarding AT&T's impending rollout of LTE, de la Vega said the company is still negotiating with potential LTE vendors and is on track to deploy LTE in 2011. In the meantime, the company believes that its deployment of HSPA 7.2 (it plans to have HSPA 7.2 deployed in 25 of its top 30 markets by the end of the second quarter of next year) will provide notably faster speeds. "We have more than a dozen 7.2 devices available and more to come," de la Vega added.